Over the past few years, homeowners have gotten used to the idea that pretty much every house sells quickly and for over the asking price. Houses were selling in such record time that most sellers never even had to consider the thought of reducing their price.
But the market has changed recently, due in large part to mortgage rates rising considerably. This has priced some buyers completely out of the market, made others hesitant to buy, and reduced the buying power of those who are still ready, willing, and able to buy a house.
So, depending upon your area and price range, your house might not sell in the first couple of weeks, let alone the first few days of it being on the market. Not that a couple of weeks is all that long to sell your house from a historical perspective; houses can take months to sell in some markets.
Regardless of whether it’s a fast-paced market like we’re coming out of, or one where it takes months for a house to sell, many people would think reducing the price of a house after just a couple of weeks on the market sounds a bit too soon and unreasonable. But if you’re selling your house and haven’t gotten an acceptable offer in the first two weeks, there’s a good chance your agent will suggest that you reduce your price… and for good reason.
Why Do Agents Suggest Reducing Your Price After Just Two Weeks?
Every agent, market, and situation is different, so it’s not definite that your agent will suggest reducing your listing price after two weeks. However, it’s a fairly common amount of time for agents to give a listing a fair test run, and assess how the market reacted.
The reasoning is that the first two weeks are when you’ll see the highest amount of activity from buyers. Serious buyers, people who are just thinking about buying, and nosy neighbors all flock to new listings when they first hit the market.
But the serious buyers are the ones who truly matter. They’re the most informed about what’s on the market, how one house compares to another, and ultimately whether something is worth what the seller is asking. And most importantly, they’re ready and anxious to make an offer immediately on a house they like so they don’t lose it to another buyer, regardless whether the pace of the market is fast, slow, or somewhere in between.
So if you go a couple of weeks and none of the serious buyers in your area and price range have made an offer, that’s a pretty good sign that the buyers don’t feel like your house is worth the price you’re asking, and why your agent might suggest reducing the price.
Things to Consider if Your Agent Is Suggesting a Price Reduction
No matter how much (or little) you trust your agent’s expertise and advice, it can be difficult for some sellers to understand what their agent is basing their suggestion upon, other than it just being on the market for two weeks without selling. While the two-week rule of thumb has a solid basis, you should also consider a few other factors that your agent likely takes into account, before you decide whether or not to reduce the price of your house.
Here are some questions to help you have an educated discussion with your agent, and make a well-informed decision:
- Were there offers being made on other competing houses? If so, that’s a definite sign that buyers are actively making offers, but chose another house over yours. This is difficult to ascertain at times, because offers being made aren’t typically trackable. But agents often have a handle on which houses are receiving offers due to interacting with other local agents.
- Did anything else in your area and price range go under contract? Receiving offers is one thing, but accepting one is another. If any house you’re competing with actually goes under contract, the downside is that one of your potential buyers is now gone. On the flip side, one of the houses you’re competing with is gone, too. You’ll need to weigh both of those things in your decision to reduce your price or not.
- Were the competing houses that buyers made offers on better than yours? Honesty can be hard, but make sure that the houses you’re assessing against truly were similar in size, condition, and location to yours. It’s easy to put blinders on and feel like your house is the greatest one on the market, but it helps if you can be as objective as possible.
- Was your house priced appropriately to begin with? It won’t do you any good to assess the market activity if your house isn’t even in the proper market price point. If your agent originally suggested a lower listing price based upon their comparative market analysis (CMA) and you opted to list your house for a higher amount, then you should consider reducing your price to the one they initially suggested.
- Has the market changed since you first decided upon a list price? Whether you listed at the price your agent originally suggested or not, consider whether the market has changed since you originally discussed and decided upon your list price. The real estate market doesn’t typically have drastic ups and downs like the stock market, but it can change enough in a short period of time to impact the activity you expected, or the appropriateness of your price.
How Much Should You Reduce the Price?
There’s no way to say that a certain percentage price reduction is appropriate for every single seller in every single situation. It boils down to reducing it enough to get the attention of the current buyers in the market, and make them feel the need to act before it’s too late. Doing that is as much art as it is data-driven science…
…which is why you should ultimately trust the judgment and advice of your agent — who knows the local market, your particular home, and your situation — about when to reduce, and how much to reduce the price of your house.
In many areas and price ranges, houses aren’t selling as quickly as they were in recent years. Many houses were selling well before being on the market for two weeks, which is about the timeframe when agents suggest reducing the asking price if there haven’t been any acceptable offers.
Even though two weeks might not sound like enough time on the market before reducing your price, it’s enough time to assess whether or not your price is appropriate. If your agent is suggesting a price reduction after two weeks, be open to an objective discussion about the reasons you should consider doing so.